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08 January 2024 - NW4201

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De Villiers, Mr JN to ask the Minister of Small Business Development

Whether, with regard to the energy relief package promised to small-, medium-, informal-and micro businesses, there has been any consultation with the National Treasury and/or other relevant stakeholders to ensure the feasibility and funding of the initiative; if not, what is the position in this regard; if so, what are the relevant details of such consultations?”

Reply:

I have been advised that:

The Department of Small Business Development engaged the National Treasury in March 2023 for funding to assist SMMEs to deal with the effects of load shedding under a programme called “Energy Relief”, also known as “the Power Purchase”, and the request was not approved by the National Treasury.

08 January 2024 - NW3182

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Luthuli, Mr BN to ask the Minister of Small Business Development

Whether her department has purchased any new vehicles since her appointment to Office; if not, why not; if so, what (a) did each vehicle cost and (b) is the (i) make and (ii) model of each new vehicle?”

Reply:

Yes the Department of Small Business Development (DSBD) purchased new vehicles during the Minister’s appointment to office. To note however, when the Minister was appointed in the department there was a procurement process already underway for one (1) vehicle for the previous Minister was later transferred to the Department of Communications and Digital Technologies.

Therefore, in total Eight (8) vehicles were purchased since the Minister was appointed in the department.

To avoid the cost of hiring vehicles within the department five (5) vehicles were purchased and the details of the vehicles purchased are provided below.

Detail

Breakdown

  1. Cost of each vehicle

Total cost

Eight (8) vehicles were purchased: three (3) for Minister of Small Business Development and five (5) for departmental pool purposes.

One (1) vehicle was procured in 2021/2022 financial year and was transferred to the Department of Communications and Digital Technologies

2021/22: Audi Q5: 1 @ R726 469.25

R 726 469.25

 

Five (5) departmental pool vehicles Nissan Almera 1.5 procured in 2022/2023 financial year

2022/23 Nissan Almera: 5 @ R242 955.03 each

R1 214 775.15

 

Two (2) vehicles were procured in 2023/2024 financial year and allocated to DSBD Pretoria and Cape Town Offices.

2023/24: Audi Q5: 2 @ R790 000.00 each

R1 580 000

     

R3 521 244.40

(b) Make and model of each vehicle:

Year

  1. Make of the Vehicle
  1. Model of each vehicle

2021/2022 financial year

Transferred to DCDT:

Audi Q5

Model: FYGCFY-E00,

Audi Q5 40 TDI 140KW quattro S line tronic, and Paint & Trim

2022/23 financial year

Five (5) X Nissan Almera

Model: Nissan Almera 1.5 Acenta MT

2023/2024 financial year

Audi Q5

Cape Town:

Model: FYGAFY-E00

Audi Q5 40 TDI 140KW quattro S tronic.

 

Audi Q5

Pretoria:

Model: FYGAFY-E00

Audi Q5 40 TDI 140KW quattro S tronic

08 January 2024 - NW3159

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Luthuli, Mr BN to ask the Minister of Small Business Development

Whether the needs of any specific sector of the economy of the Republic that were reported to her office in the past financial year are receiving priority; if not, why not; if so, what are the relevant details?”

Reply:

I have been advised that:

The Department of Small Business Development (DSBD) has not assessed the sectoral needs of the small business development segment of the economy. However, there has been work around the challenges faced by SMMEs and Co-operatives. These challenges relate to excess red tape, access to finance, access to markets, a lack of inclusion of SMMEs in the value chains of big business, lack of access to information and a lack of skills and knowledge on entrepreneurship. To address some of these issues, the DSBD has formulated and executed several interventions aimed at ensuring the participation of MSMEs in the mainstream economy. These include, inter alia, increasing access to developmental funding, expanding support to township and rural enterprises, building access to markets, and improving the regulatory environment. These challenges remain prevalent in most of the sectors in which small businesses operate.

To demonstrate its commitment to the development of SMMEs in the various sectors of the economy, the DSBD established the Small Enterprise Manufacturing Support Programme (SEMSP), as one of the responses to the needs of the small enterprises operating within the manufacturing sector/industry. The programme is considered as one of the contributions to the localization strategy and supports manufacturing enterprises to increase the contribution of manufacturing within the Gross Domestic Product (GDP) of the South African economy.

The main intention of the Small Enterprise Manufacturing Support Programme (SEMSP) is to replace imports through locally manufactured goods thereby increasing small enterprises production capacity, growth, sustainability, and competitiveness. The support received by small enterprises through the SEMSP includes financial and non-financial to enhance technical skills, business infrastructure support (buildings and machinery) as well as market access. The programme prioritises various categories of manufacturing such as light consumer goods, hi-tech and industrial production which are associated with the sub-sectors such as furniture, basic iron and steel, petroleum and chemical, food and beverages (agro-processing), electrical, green technology etc.

Thus far, SEMSP performance overview for the past three financial years (i.e., 2020/21 to 2022/23) reflects approvals for all nine provinces at about R800M. The first year disbursements were at about R320M, second year being R237M and third year R274M as reflected below.

Figure 1: SEMSP approval 2020/21 to 2022/23

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The DSBD has increased its involvement in the Cannabis industry. The aim of this involvement is to address some of the challenges faced by MSMEs in the sector. These challenges include, among others, regulatory environment, research, and development (Biomass quality, processing, and product quality), branding (markets), and financing.

The DSBD is working on a Cannabis Pilot Project with the Council for Scientific and Industrial Research (CSIR) to conduct research and gather information regarding the how we could create opportunities for the creation of small enterprises across the Cannabis value chains, as well as on establishing and increasing the manufacturing capacity of the South African Cannabis industry.

In the main, this initiative is aimed at the development of interventions that are informed by evidence; the promotion and advocacy for an enabling policy, legal and regulatory environment, especially advocacy for ease and accessible issuing of cannabis producing operating licenses for start-ups. It is also the intention of the Pilot Project to develop targeted instruments to support small enterprises (Business Development Services and Financial Support). The development of the Cannabis industry will require a collaborative effort from relevant stakeholders. It is for this reason that we encourage strategic partnerships (public and private) to be formed to advance an inclusive, sustainable, and globally competitive Cannabis industry in South Africa.

The DSBD has developed the Cannabis Small Enterprises Support Plan (CSESP), the aim of which is to develop an instrument for the support and promotion of small enterprises within cannabis industry value chains.

The DSBD–CSIR have also collaborated to establish an Incubation Programme that assists MSMEs to partake in the Cannabis industry. The intention of this programme is to conduct primary (not cultivation/harvesting), secondary, and downstream processing of Cannabis and Hemp biomass. Moreover, there is specific focus on the formulation and re-iteration of low THC cannabis/hemp product prototypes, as well as the upscaling and testing of the range of low THC cannabis-based products for the selected enterprises. The tail end of the process requires the partners to facilitate contract manufacturing of at least 100 market ready samples, at GMP facility, for each MSME to test the formal markets.

To respond to the needs of MSMEs operating in township and rural areas, the DSBD formulated the Township and Rural Entrepreneurship Programme (TREP). The Scheme is aimed at supporting small enterprises to participate in the rebuilding and restructuring of the economy in townships and rural areas, improve the quality and competitiveness of small enterprises for both domestic supply and export market, and seize the opportunities in the various sectors of the economy. The Scheme supports all small enterprises operating in townships and rural areas that meet the qualifying criteria including but not limited to sectors such as Clothing & Textile, Bakeries & Confectionaries, Tshisanyama and Cooked Food, Retail (including restaurants, car washes, general dealers, etc.), Automotive, Personal Care, and Artisans.

To penetrate various local and international markets, the DSBD is implementing a localisation programme with the intention of building the manufacturing capacity of SMMEs. It is anticipated that the increased capacity and capability of SMMEs will assist with market access opportunities for SMME manufactured products. Essentially, the DSBD and its agencies, the Small Enterprise Development Agency (Seda) and the Small Enterprise Finance Agency (sefa), provide support and preparation of SMMEs towards import replacement and export market penetration.

On the regulatory environment front, the DSBD continues to roll out the red tape reduction guidelines – working together with municipalities. Several municipalities have been covered across the country.

08 January 2024 - NW4200

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De Villiers, Mr JN to ask the Minister of Small Business Development

Whether she will provide an update on (a)(i) the status and (ii) specific details of the energy relief package announced on 18 January 2023 and (b)(i) the steps taken towards its implementation and (ii) the expected timeline for delivery?”

Reply:

I have been advised that:

The Department of Small Business Development engaged the National Treasury in March 2023 for funding to assist SMMEs to deal with the effects of load shedding under a programme called “Energy Relief”, also known as “the Power Purchase”, and the request was not approved by the National Treasury.

An update on this was provided to the Portfolio Committee.

08 January 2024 - NW4158

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Luthuli, Mr BN to ask the Minister of Small Business Development

Whether her department has put in place any new mechanisms to ensure continuous support to small, medium and micro enterprises during pandemics such as COVID-19; if not, why not; if so, what are the relevant details?”

Reply:

I have been advised that:

The Department of Small Business Development (DSBD) has not institutionalised the provision of emergence relief measures to small, medium and micro enterprises due to limited budget; however we will continue to apply to National Treasury whenever there is a pandemic or a disaster.

08 January 2024 - NW4157

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Luthuli, Mr BN to ask the Minister of Small Business Development

Whether her department has any step-by-step mechanisms in place to (a) encourage and make a provision for youth entrepreneurship and (b) address youth unemployment in line with the Government’s priority; if not, why not; if so, what are the relevant details?”

Reply:

I have been advised that:

a) In a quest to cultivate an enterprising culture amongst the youth, the Department of Small Business Development (DSBD) has designed support measures for youth-owned businesses. This presents much greater opportunities for isolated and marginalised youth into the economic mainstream in respect of which targeted measures are necessary for accelerating the promotion of youth businesses and self-employment. It is in this light, that the DSBD is increasingly expanding its programmes but more importantly, designing targeted instruments assisting youth owned enterprises with enterprise development.

As at the end of Quarter 2 of the current financial year, the Small Enterprise Development Agency (Seda), with limited resources, has provided 10,616 skills development and other business development support for youth entrepreneurship which may include interventions such as, but not limited to Financial Management training, Access to funding, Basic Business skills training, Information and Business Advice, Business Plans, Training and Mentoring, entrepreneurship awareness, etc.

Seda has an Entrepreneurship in Schools Programme that encourages learners to consider entrepreneurship as an alternative career to employment. The main objective of the programme is:

  1. To influence the mind set of learners by encouraging them to become job creators instead of job seekers once they leave the schooling system;
  2. To equip learners with entrepreneurial knowledge and skills needed to start and manage their businesses; and
  3. To improve entrepreneurial activity amongst the learners and educators.

Entrepreneurship in schools (Step up to a Start Up) is a programme together with Primestars that will support educators through boot camps to create entrepreneurship awareness amongst the youth and educators.

Furthermore, through Sefa the department has the Youth Challenge Fund (YCF) – the primary objective of the fund is to provide support to youth Start-Up enterprises which are formally registered and is thus seen as an approach to assist in ensuring the economic participation of young people. This is intended to support most promising young entrepreneurs intending to scale-up and growing their businesses.

b) Since its inception the Youth Challenge Fund in November 2021, the programme has approved loans to the value of R227 798 265 to 66 youth-owned businesses and has disbursed R150 348 036 to 42 youth-owned businesses. On the other hand, Seda has also signed a three-year MoU with the National Skills Fund. It includes Work Integrated Learning for 1500 unemployed graduates who will be trained to provide mentorship to 12 500 micro enterprises.

In addition to the above, there other events that seek to orientate young people around entrepreneurship development and opportunities:

  1. Seda Eastern Cape in collaboration with the KSD TVET college presented an information session to eighty (80) youth on entrepreneurship awareness. The event took place from on 6-12 June 2023.
  2. On 10 May 2023 the Sol Plaatje University (SPU) hosted a Career Fair in partnership with public entities to share Career and Personal Development Opportunities for Graduates to advance employability and Business Opportunities in the Northern Cape.
  3. So are the other events such as Seda Eastern Cape’s Amathole Branch which held an eco-system stakeholder meeting by the Border Kei Chamber of Commerce on 22 June 2023. The Chamber is in the process of opening a youth desk focusing on Youth Development in its entirety. The youth desk comes as a follow-up to their annual Youth Reality Conference that the Chamber has been hosting for the past few years. The event attracts over two thousand (2000) young people in and around Buffalo City Municipality (BCM). The chamber has identified challenges that the young people face, and in collaboration with partners seeking to address some of these challenges. One of the challenges being the high level of unemployment among young people.
  4. Seda Nkomazi branch in Mpumalanga made a presentation on Seda’s offerings at the Aids Foundation of South Africa from the 30 May -1 June 2023 in Mangweni, Buffelspruit and Naas respectively. The purpose of this collaboration was to implement a young women focused programme, of empowering them with skills including employability, entrepreneurship, and financial literacy.
  5. The Nkangala Branch and other stakeholders in Mpumalanga participated in the youth month seminar “Leave Your Legacy” organised by Mpumalanga Economic Growth Agency (MEGA). A presentation on Seda products and services, opportunities that are available to youth and Township and Rural Entrepreneurship Programme (TREP) was done. The event was attended by twenty-one (21) youth entrepreneurs, and it took place on the 14 June 2023.

These are some few activities amongst many that seek to orientate young people on entrepreneurship development and available support services provided by the SBD Portfolio.

27 December 2023 - NW3817

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Luthuli, Mr BN to ask the Minister of Small Business Development

What (a) total amount was spent on the sustenance and development of (i) small-, medium- and micro enterprises and (ii) informal businesses in the (aa) townships and (bb) rural areas during the COVID-19 lockdown in each province, (b) post-COVID-19 support was offered to the specified businesses, (c) total number of the businesses supported in this way during the COVID-19 lockdown are still operational and (d) are the further relevant details in each case?”

Reply:

I have been advised that:

a) The Department of Small Business Development (DSBD) through the Small Enterprise Finance Agency (sefa) provided support to small businesses during the Covid-19 pandemic. sefa contributed towards the Covid-19 emergency fund (relief programme) which was aimed at providing relief to small businesses during the pandemic. Through the fund, sefa disbursed R316 million to 1 144 small businesses. Of this amount, R28 million was disbursed to businesses in townships and R60 million were to businesses in rural areas.

(a)(i)&(ii)

b) An additional R10 million was disbursed towards business growth and resilience facilities.

R105 million has been approved for SMME payment holidays. The Department further introduced the Economic Recovery Programme to assist small businesses in the South African economy. The economic recovery programme disbursed R1.3 billion to small businesses operating in various provinces as per the table below. The disbursements to small businesses operating in townships amounted to R552 million and R392 million to those in rural areas.

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c) Through the Covid-19 relief scheme, a total of 1 161 clients were funded. As at end of September 2023, 450 clients had their loans settled, 407 are still honouring their payment obligations and 304 clients are not paying.

d) The businesses that have settled their loans are no longer under sefa monitoring. 450 clients are still honouring their payments although their term has expired. These businesses are still operational and sefa is considering restructuring these loans. The 304 clients which are not paying sefa and are handed over to pursue collection. An exercise is underway to re-verify their existence.

27 December 2023 - NW4022

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Luthuli, Mr BN to ask the Minister of Small Business Development

Whether her department enables positive and consistent contributions of township and village economies in each province that (a) encourage entrepreneurship in townships and villages and (b) provide sustainable employment to township dwellers; if not, why not, in each case; if so, what are the relevant details in each case?

Reply:

I have been advised that:

a) In Encouraging entrepreneurship in township and villages:

The Department of Small Business Development (DSBD) has in place the Township and Rural Entrepreneurship Programme (TREP) which aims to assist informal, micro and small enterprises grow their businesses. The financial package is structured at a maximum value of R1 000 000 that consist of:

  • Maximum of R1 000 000.00 towards working capital, cost of equipment, or any other CAPEX (paid directly to the supplier where applicable).
  • The financial package will be offered in the form of a blended finance with 50% of the total approved amount being a grant i.e., a maximum grant amount of R 100 000.00.

TREP supports all small enterprises operating in townships and rural areas that meet the qualifying criteria including, but not limited to, the following:

    • Clothing and Textile
    • Bakeries and Confectionaries
    • Tshisanyama and Cooked Food
    • Retail (including restaurants, car washes, general dealers etc.)
    • Automotive
    • Personal Care
    • Artisans

Also, the Small Enterprise Development Agency (Seda) has a big network of offices in the country, with 53 branches and 52 co-location points. Our co-locations are specifically established to extend access to Seda services in underserviced and rural South Africa. It is also realised that there are still several areas where entrepreneurs and SMMEs still must travel far for them to access services. Seda has therefore established 80 service points or access points. Seda will continue to expand service delivery to rural communities through various modalities whilst striking a sound balance between community needs, budget availability and collaboration with ecosystem partners. Furthermore, the organisation has 110 incubators, of which 32 are based in rural areas.

The agency also employs alternative mechanisms for ensuring that services are available, like mobile offices. Information is provided through DSBD, Seda and the Small Enterprise Finance Agency (sefa) websites and contact centers. Where possible, Seda also provides virtual interaction with those clients that can attend, for example online training and webinars. To this end, 801 clients attended virtual sessions during the 2022/23 financial year, and 1 630 during the second semester of the current financial year (2023/24). Support includes, amongst others, Pitch for funding, Access to markets, including Pop-up markets, Digital skills development training, Inventory Management Training, etc.

b) Providing sustainable employment to township dwellers:

While the Township and Rural Entrepreneurship Programme (TREP) described in part (a) is aimed at the individual entrepreneur, the National Informal Business Upliftment Strategy (NIBUS) seeks to uplift informal businesses and micro enterprises through a systemic and institutional response collaborating with and supporting local chambers/business associations and municipal Local Economic Development offices to deliver and facilitate access to upliftment programmes aimed at providing sustainable employment to township and rural dwellers, targeting informal business entrepreneurs from designated groups, i.e., women, youth, and people with disabilities.

    1. NIBUS has two Instruments under its enterprise development pillar, namely the Shared Economic Infrastructure Facility (SEIF) and the Informal and Micro Enterprise Development Programme (IMEDP).
    2. The Informal and Micro Enterprises Development Programme (IMEDP) is a 100% grant offered to informal and micro enterprises from a minimum grant amount of five hundred rand (R 500.00) up to a maximum of ten thousand rand (R10 000.00) to assist them in improving their competitiveness and sustainability.
    3. The key objective of this financial facility is to provide developmental support to informal and micro businesses that are operating in townships and rural areas of South Africa with an emphasis on support for designated groups, i.e., women, youth and persons with disabilities.
    4. The programme aims to develop and strengthen the capacity of credible informal and or micro enterprises to be sustainable through the provision of access to information, appropriate business development support and business infrastructure (machinery, tools, equipment, and stock) and excludes (working capital, conversions, clothing) for eligible applicants.
    5. Going forward, it is planned that Informal and micro enterprises are to be supported using the DSBD’s Informal and Micro Enterprise Development Programme (IMEDP) capped at R 30 000.00 for informal businesses and the Small Enterprise Development Agency (Seda) to support micro businesses with amounts above the R 30 000.00 threshold.
    6. The funding will be 100% grant for the informal sector and subject to availability of funds.

During the 2022/23 financial year, the Small Enterprise Development Agency (Seda) provided a total of 21 181 skills development and support interventions to township and rural businesses and 10 836 interventions during the second semester of the 2023-24 financial year. These interventions included amongst others Basic Business Skills, Business Start-Up 1, Cybercrimes, South African Revenue Service (SARS) Incentives, Costing & Pricing, Business Planning, Business Model Canvas, Financial Management training, Access to funding, Point of Sale Training, Access to Funding, Business Plans, Mentoring and various others.

Seda also has a dedicated programme, the Basic Entrepreneurship Skills Development (BESD) which was jointly developed by the Agency and German Federal Ministry for Economic Cooperation and Development via Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) since 2012. GIZ left the programme in December 2016 and since then the programme is funded by the National Skills Fund for an amount of R84 million. The BESD approach utilises coaching as an innovative methodology to facilitate and reinforce learning and development support to emerging entrepreneurs. A total of 2 038 Emerging Entrepreneurs were supported through the programme to date. All the project sites across the country were completed in 2019, we are currently utilising remnants of the budget to benefit more SMMEs.

Seda, through its Learning Academy, has also developed different training programmes. These programmes are credit bearing and accredited by the Services Seta. Quality training aims to assist organisations of all types to implement and operate the Quality Management System (QMS) to increase effectiveness, consistency, and customer satisfaction, explain the benefits of implementing QMS and understand the quality, management principles. Whilst Food safety introduces Food Safety, Understand Pre-Requisite programme, HACCP (Hazard Analysis, Critical, Control, Point) system and HACCP principles and Implementing a Food Safety Management System (SANS 22000:2019.).

Seda has also forged the following skills development partnerships namely:

  • A 3-year partnership with the National Skills Fund (NSF) to benefit 14 000 beneficiaries for a total budget of R 592 275 000. The aim of the project is to recruit unemployed graduates with Accounting and Business Management qualifications to be trained on New Venture Creation, Coaching, and Mentorship Programme to enhance their skills to provide support to Micro Enterprises. Seda will use coaching as an innovative methodology to facilitate and reinforce learning and development support to Micro Enterprises and the unemployed graduates will be trained on new venture creation as well as business coaching to enable them to transfer skills and knowledge to Micro Enterprise owners.
  • Seda and Wholesale and Retail Seta signed an agreement to support one thousand (1 000) Tuckshops, General Dealers to the value of R 9 975 000.
  • In 2021, DSBD, Seda and Merseta signed Agreement for Merseta to release a discretionary grant to Seda to the value of R 50million. The funding will be provided in a phased approach over a 3-year period. The purpose is to train Small Enterprise in the Automotive Trade Sector as well as facilitate Artisan Recognition of Prior Learning (ARPL).
  • A partnership between Seda, GIBBS and the Cherie Blair Foundation for Women was forged. The Cherie Blair Foundation has an award-winning Mobile App that offers women entrepreneurs essential business training and support on the go. It features a range of learning tracks on topics including launching a business, accessing finance, expanding market access, e-commerce, and mobile money.

During the first two quarters of the 2023/24 financial the Township and Rural Entrepreneurship Programme supported the sustaining and/or creation of 10 884 jobs, whilst 38 059 jobs were supported in the 2022/23 financial year.

Proposed future interventions will utilise a macroeconomic approach that combines the expertise of public and private sector partners to counteract resource and capacity constraints.

Furthermore, provision of sustainable employment to township dwellers the level of the social economy and community empowerment levels include through the Co-operatives Development and Support Programme (CDSP), for new and budding primary co-operatives.

  1. There is a start-up grant of up to R1,5 million, up to R2.5 million for growing primary co-operatives and up to R5 million for secondary co-operatives.
  2. All co-operatives to be funded are subjected to co-operative governance training so as to ensure that they understand what is expected from them in running a successful organisation.

27 December 2023 - NW4021

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Luthuli, Mr BN to ask the Minister of Small Business Development

What was the total (a) amount spent on her and her Deputy Minister’s travel costs in the 2022-23 financial year, (b) number of trips she and her Deputy Minister undertook in the specified financial year, (c) amount spent by her department on (i) hotel, (ii) residential and/or (iii) other accommodation for her and her Deputy Minister and (d) amount of any further costs incurred by her department in relation to such travel?

Reply:

I have been advised that:

(a) The total amount spent on the Minister and her Deputy Minister’s travel costs in the 2022-23 financial year is R2 615 876.16

(b) The number of trips the Minister and her Deputy Minister undertook in the specified financial year: 198 domestic trips and 12 international trips

(c) The amount spent by her department on:

(i) Hotel: R474 660.68

(ii) Residential: R0.00 (The Deputy Minister has been allocated state accommodation in Cape Town and Pretoria and DSBD has not incurred costs on rental or maintenance as it is the Department of Public Works and Infrastructure (DPWI)-Prestige responsibility. The monthly fee is charged from the Deputy Minister’s salary in line with the lease agreement signed by herself (an amount of R1 196.57). The Department of Small Business Development (DSBD) has only spent on relocation costs and related housekeeping services.

(iii) Other accommodation for the Minister and her Deputy Minister: R0.00

(d) The amount of any further costs incurred by her department in relation to such travel: R2 141 215.48, this is the cost of domestic air travel, car hire and international air travel (see table below).

DSBD - Minister and Deputy Minister Travel Expenses for the Period April 2022 to March 2023

Category

Number of transactions

Amount “R”

Domestic Air Travel

195

783 799.39

Accommodation Domestic

98

474 660.68

Car Hire

62

1 234 134.69

International Air Travel

12

123 281.40

Total

367

2 615 876.16

27 December 2023 - NW3806

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Luthuli, Ms SA to ask the Minister of Small Business Development

Whether she will furnish Inkosi B N Luthuli with records of tangible achievements of her department since its establishment in 2014; if not, what is the position in this regard; if so, what are the relevant details?”

Reply:

In 1994, the new government inherited a highly unequal and concentrated economy, with very low levels of entrepreneurship, little to no black economic ownership, and an extremely weak and fragmented SMME support eco-system.

This made South Africa an outlier. SMMEs play a major role as a driver of growth and employment in both developed and developing economies.

To realise the growth and jobs potential of SMMEs, Government established the Department of Small Business Development in 2014. The mandate of the Department Small Business Development (DSBD) is defined: “to lead and coordinate an integrated approach to the promotion and development of entrepreneurship, Small, Micro and Medium Enterprises (SMMEs) and Co-operatives, and to ensure an enabling legislative and policy environment to support their growth and sustainability”.

Since its inception, the work of the DSBD has been driven by several key policy frameworks, including the National Development Plan, Vision 2030, which is aimed at harnessing the potential of SMMEs, Co-operatives and the informal sector, and sets specific goals for the small business sector as follows:

  • To enhance economic growth through SMMEs and Co-operatives as assessed through an increased contribution by the sector to GDP.
  • To enhance economic growth through SMMEs as assessed through an increased contribution by the sector to GDP.
  • To create 9 million of South Africa’s 11 million needed jobs by 2030 through the SMME sector.
  • To reduce the cost of regulatory compliance and promote ease of doing business for SMMEs and ensure policy coherence through partnerships among for SMMEs and ensure policy coherence through partnerships among key societal players, business and government.

The work of the DSBD has until recently been framed by the Integrated Strategy on the Promotion of Entrepreneurship and Small Enterprises (ISPESE), which was reviewed and a new national SMME and co-operatives strategy developed – the National Integrated Small Enterprise Development Strategic Framework (NISED) – adopted by Cabinet and launched in November 2022.

The ISPESE and NISED have been focused on addressing the core constraints faced by SMMEs and co-operatives, including:

  • Red-tape and regulatory burdens.
  • Market concentration, and lack of access to markets.
  • The lack of access to finance, and
  • Weak entrepreneurial and business development skills, and

Progress since 2014 is framed around what has been done to address these constraints and create a more enabling environment for SMMEs and co-operatives.

Red-Tape

To address the issues of reduced cost of doing business and regulatory compliance in South Africa, commonly referred to as red tape, the Department of Small Business Development (DSBD) is the custodian of red tape reduction (RTR) for Small, Medium and Micro Enterprises (SMMEs) and has initiated a number of interventions to reduce red-tape for SMMEs and co-operatives.

This includes reviewing the Businesses Act (1991), which was transferred from the Department of Trade Industry and Competition (the dtic) to the DSBD in the 2020/21 financial year. The DSBD has reviewed the Act and is in the process of finalising the Business Licensing Amendment Bill. Recently Cabinet has approved the National Business Licensing Policy for gazetting for public comments, by the end of the term a policy on Business Licensing will have been finalised.

The other piece of legislation which has been reviewed is the National Small Enterprise Act, 1996 (Act No. 102 of 1996). A National Small Enterprise Amendment Bill, 2023, has been developed and is currently before Parliament, National Assembly has referred this to the NCOP for concurrence and this should be finalised by the end of February by Parliament. The amendments:

  • provide for the establishment and registration, in terms of the Companies Act, No. 71 of 2008, of the Small Enterprise Development Finance Agency (SEDFA) and the subsequent incorporation into SEDFA of the sefa, the Co-operative Banks Development Agency (CBDA) and the Seda.
  • establish of the Office of the Small Enterprise Ombud Service ("the Office").
  • enable the Minister to declare certain practices in relation to small enterprises to be prohibited as unfair trading practices.
  • propose an amendment to section 20(2) of the Act to provide clarity on the interpretation of the powers assigned to the Minister in amending the Schedule to the Act as well as the definition for small enterprises, to allow for simplification of the Schedule.

The DSBD has also, in 2023, undertaken a “Rapid Review of ALL legislation that impacts SMMEs and Co-operatives” for “regulatory guillotining”, that is, at the level of National, Provincial and Local Government.

The DESBD has also supported red-tape reduction at municipal level, and has supported 23 Districts, 108 municipalities, and 4 Metros to roll out the Red-Tape Reduction Awareness Programme. Recently, the department has piloted the Pilot Administrative Simplification Programme (PASP) in association with KwaZulu-Natal EDTEA, COGTA and SALGA, targeting key red-tape reduction including access to infrastructure (specifically water as it permeates all municipalities), customer/complaints management, municipal policies, by-laws/regulations; land development and SPLUMA, building plan approval timelines/processes; and informal trading management. The idea is to consolidate this is a Municipal Red Tape Reduction Dashboard.

Market access

To address market access, the Department developed and continues to implement the SMMEs-focused Localisation Policy Framework that was adopted by Cabinet during the course of the 2020/21 financial year. At the end of 2022/23 financial year, 807 products produced by SMMEs, and Co-operatives were linked/introduced to domestic markets through working relationships with large retailers and wholesalers across the country against a five-year target of 1 000 products.

To drive localisation, the Department designed a focused Small Enterprise Manufacturing Support Programme (SEMSP) aimed at building and supporting SMMEs participating in the manufacturing value chain. The purpose of the SEMSP is to build a manufacturing sector for an improved industrial base through a focused import replacement programme and build the industrial base for both the domestic market and external market. The Programme aims to contribute to South Africa’s localisation strategy. As at 30 September 2023, SEMSP approvals concluded amounted to R879.2m to 94 SMMEs, facilitating 5295 jobs.

The DSBD has also partnered with the International Trade Centre to improve market access for women-led enterprises. As of 30 September 2023, the total cumulative number of South African members registered on the ITC SheTradesZA platform is 3004, whilst the ITC'S web developers finalise the system update. The Department is continuing to intensify its effort working towards realising its outcome to increase participation of women, youth and persons with disabilities, SMMMEs and Co-operatives in the domestic and international markets.

To date, 188 SMMEs and Cooperatives were exposed to global market opportunities, between 2022/23 and 2023/24, through international missions, exhibitions, and fairs. Our work in exposing SMME products and services to global markets through the Small Business Exported Development Scheme has seen an extension in driving the African Continental Free Trade Area (AFCFTA) markets during the 2023/24 financial year.

The other area of focus for DSBD has been the opening of corporate supply chains for SMMEs and co-operatives. To this end, an Enterprise Supplier Development (ESD) Community of Practice (COP) has been established with the private sector to overcome fragmentation and strengthen the key element of targeted entrepreneurship development. The ESD COP is complemented with an ESD e-learning platform and a series of masterclasses by Seda along with a website for COP member recruitment and the promotion of capacity building events and activities.

Access to finance

Here the focus has been on supporting SMMEs and co-operatives from under-served communities with access to finance, be it direct lending, blended finance, and micro-finance.

There have been numerous instruments designed and impended since 2014. This includes those for supporting SMMEs, Cooperatives and informal enterprises in townships and rural areas such as the Township and Rural Entrepreneurship programme. There are instruments for youth, such as the Youth Challenge Fund, those targeting people with disabilities such as the Amavulandlela Funding Scheme, as well as those implemented during COVID-19 to support SMMEs and Cooperatives experiencing financial distress such as the Business Viability Programme

Since 1 April 2014 to 31 October 2023, the DSBD, through its implementing agency sefa, approved loans to the value of R12.3 billion, disbursed into the South African economy R14.5 billion[1], and provided financial support to 597 473 SMMEs and Co-operatives. These funded clients in turn helped create and retain 809 148 jobs.

In terms of developmental impact:

  • sefa disbursed R11.6 billion to enterprises owned by black entrepreneurs,
  • R5.5 billion to women-owned businesses,
  • R2.9 billion to businesses owned by youth,
  • R109 million to enterprises owned by persons with disabilities,
  • R1.9 billion to small businesses operating in the townships, and
  • R4.4 billion to enterprises operating in rural towns and villages.

The DSBD has also developed an SMME and Co-operatives Funding Policy to ensure improvement in access to finance for SMMEs and Co-operatives. The Policy is now at NEDLAC.

Business Development Services

Much of DSBD’s entrepreneurship and business development support is implemented through Seda. Since 2014, the following has been achieved:

Number of clients reached through entrepreneurship awareness sessions

201 879

Number of clients supported with various interventions

414 205

Number of clients supported through Incubation Programme

69 840

Number of incubation centres established

110

Number of jobs created by supported clients

38 787

Number of jobs sustained by supported clients

62 118

The 110 Incubation Centers and Digital Hubs are aimed at nurturing new and existing small enterprises by providing them with financial and technical advice pertaining to the running of a business. The breakdown of these 110 that are in various stages of implementation is 73 Technology Business Incubators; 31 centers for Entrepreneurship and Rapid Incubation; and six Township and Digital Hubs that focus on various designated sectors within which small business start-ups are functioning.

The goal of increasing incubation centers and digital hubs to 100 by 2024 has already been achieved, and the new focus is on improving governance, independent sustainability and returns on investments.

Conclusion

As is evident, much has been achieved since the establishment of the DSBD in 2014. But much more needs to be done to place SMMEs at the centre of driving the country’s inclusive growth. The merger of Seda, sefa and the CBDA will provide seamless and customised support to the sector but needs to be effectively capitalised to effectively contribute to addressing the triple challenges of poverty, unemployment and inequality, and leveraging the kinds of partnerships envisaged in the NISED.

  1. Due to the nature of sefa’s partnership with the intermediaries, disbursements are always higher because the intermediaries roll sefa’s money several times a year before paying it back.

07 December 2023 - NW3384

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Luthuli, Mr BN to ask the Minister of Small Business Development

What total (a) number of new (i) small and (ii) medium-scale businesses have been established and registered in each province since 1 January 2023, and (b)(i) amount has been spent to develop the specified businesses and (ii) in what manner was this done?”

Reply:

I have been advised that:

a) The Department of Small Business Development (DSBD) does not have an instrument to quantify the number of established businesses in a given time. The Companies and Intellectual Property Commission (CIPC) either has to do the analysis of differentiating the registered businesses according to the size class. However, the DSBD agency, Seda, through the Bureau of Economic Research in Stellenbosch undertakes periodic statistical research on the growth of the SMME sector. The latest results show that the total number of SMMEs rose by a significant 148 000 firms (+5.9% year-on-year). This brought the level of SMMEs back to its pre-COVID level. Meanwhile, the total level of employment in the economy remains below its pre-COVID level. Relative to 2021Q3, the number of SMME owners rose by 11.6% to 2.68 million. On an annual basis, the 17% increase in formal SMMEs is encouraging – albeit that the majority of SMMEs still operate in the informal space. The statistics are collected on a quarterly basis and the current figure is for 3rd quarter of 2022/23 financial year and therefore does not capture numbers from January 2023. This period has not been released yet.

(b)(i) Despite the fact that the DSBD does not have an instrument to quantify the number of established businesses in a given time, Seda is able to report their support for small, and medium enterprises as per the table below:

Province

No. of clients Supported

R Value of Support

Eastern Cape

21

R 2 571 935

Free State

374

R 1 383 606

Gauteng

103

R 1 224 186

KwaZulu Natal

311

R 4 431 613

Limpopo

77

R 971 346

Mpumalanga

222

R 995 462

North-West

35

R 375 560

Northern Cape

176

R 1 093 195

Western Cape

243

R 3 521 397

During the same period, 1 January 2023 to 30 September 2023, sefa was able to support SMMEs as per the tables below:

Number of SMMEs Financed 1 Jan 2023 to 30 Sept 2023

Eastern Cape

10 006

Free State

606

Gauteng

1 282

KwaZulu Natal

6 654

Limpopo

11 808

Mpumalanga

6 573

Northern Cape

77

North West

4 092

Western Cape

380

Unclassified

124

Total

41 602

sefa disbursed R1.37 billion to 41 602 SMMEs as follows:

Province

Number of SMMEs Financed

Amount Disbursed

Eastern Cape

10 006

R126 366 218

Free State

606

R20 504 421

Gauteng

1 282

R447 510 567

KwaZulu Natal

6 654

R261 820 491

Limpopo

11 808

R144 003 460

Mpumalanga

6 573

R138 369 180

Northern Cape

77

R10 148 996

North West

4 092

R51 907 193

Western Cape

380

R166 101 683

Unclassified

124

R2 309 605

Total

41 602

R1 369 041 814

(ii) This support was provided through various programmes. These include but is not limited to, the Manufacturing Support Programme, Supplier Development Programme, Empretec Programme, Export Development Programme, and the Women’s Enterprise Coaching Programme.

Seda’s service also extends to its Technology Programme, Incubation Programme and the Quality and Standards Programme.

07 December 2023 - NW3395

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Luthuli, Mr BN to ask the Minister of Small Business Development

Whether her department has put timeframes in place to resolve the problems of red tape around access to funding by small-scale and informal businesses and/or its lack thereof; if not, why not; if so, what are the relevant details?”

Reply:

I have been advised that:

The Department of Small Business Development (DSBD) is planning to implement the SMMEs and Co-operatives Funding Policy in the 2024/25 financial year with a view to resolve the problems of red tape around access to funding by small-scale and informal businesses. The following are proposed interventions:

  • To reduce the red tape on access to funding by small enterprises, the SMMEs and Co-operatives Funding Policy is proposing that the financiers must implement a simplified lending process by introducing common funding application form, standardised term sheet and business plan template. This will make the referral of misdirected funding applications seamless.
  • That the funding institutions digitise their funding application processes to address the issue of prolonged lead times on funding applications, more especially in instances where capital is required on an urgent basis for working capital or purchase of raw material to service a contract.
  • As part of financial literacy, the SMMEs and Co-operatives Funding Policy requires that the Business Development Service providers in South Africa institutionalise the practice of assisting SMMEs and Co-operatives with pre-funding support (compliance, directing small businesses to the relevant financiers, matching funding to business needs, etc.).
  • The banks’ preferred collateral is not aligned to the asset composition of small enterprises which mainly consists of short-term (movable) assets in the form of inventories, receivables, insurance policy and cash deposits. To alleviate this challenge, the SMMEs and Co-operatives Funding Policy proposes that the DSBD develop an enabling legislation for the operation of the movable collateral registry in South Africa and to provide operational infrastructure for such a registry.

07 December 2023 - NW3299

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Luthuli, Mr BN to ask the Minister of Small Business Development

Considering that approximately 70% to 80% of small businesses fail within the first five years since inception, especially in disadvantaged communities that are the most in need of jobs and economic activity, how has her department capacitated the SA Small Enterprise Finance Agency in the past 12 months to continue the implementation of the Township and Rural Entrepreneurship Programme?”

Reply:

I have been advised that:

The Department of Small Business Development (DSBD) capacitated the Small Enterprise Finance Agency (sefa) by transferring a total amount of R885 939 000.00 in the past 12 months (01 October 2022 to 30 September 2023) to continue the implementation of the Township and Rural Entrepreneurship Programme (TREP).

Date transferred

Amount

25-Nov-2023

R 238 313 000

24-Jan-2023

R 238 386 000

26-May-2023

R 181 884 000

30-Aug-2023

R 227 356 000

Total transferred

R885 939 000

The DSBD and its entity sefa are reviewing a number of moderations/improvements that if approved, will result in improved uptake of the TREP and a wider reach of targeted beneficiaries. These improvements include:

  • Strategic Partnership / Joint Venture with the key industry players such as Masisizane Fund, African Bank, Lulalend, Standard Bank and other key intermediaries within the sefa Wholesale Lending portfolio. Forging partnerships with the key stakeholders to develop accessible and innovative solutions that addresses client challenges has a potential of ensuring that TREP makes a developmental impact in the economy.
  • 18 District Co-ordinators employed in those districts where uptake of DSBD products is low to work together with the Small Enterprise Development Agency (Seda) in the districts to assist with building a sizeable pipeline for all DSBD offerings.
  • Increase TREP resources – Five (5) interns responsible for pre-screening new applications and establishing initial contact with applicants were employed. Increasing the number of TREP resources will enable the programme to improve its performance by increasing the number of approvals, disbursements, and impact numbers. Employing more people on a commission basis across various access points and co-locations particularly the rural space.
  • Basic assessment to be conducted upfront by Compliance in relation to Financial Intelligence Centre Act (FICA), PIP and ITC to ensure that we consider bankable deals.
  • Reduction of TREP requirements for deals below R350 000 – the qualifying criteria is cumbersome for starts-up and informal businesses. It is therefore imperative to review the TREP requirements particularly for small and upcoming businesses. Basis of on lending is purely based on the financial viability and repayment ability but that is different for start-ups and businesses operating in townships hence we need to review some of the TREP requirements.

The current review process is looking at the administrative, logistical, financial and legal ramifications of each of the proposed improvements to avoid any comeback and delays once the revised programme hits the market. These proposals are looked at through a phased approach and timelines range from 01 June 2023 – 31 March 2024.

30 October 2023 - NW2754

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Krumbock, Mr GR to ask the Minister of Small Business Development

(a) What total amount did (i) her department and (ii) each entity reporting to her pay for printed copies of the integrated annual reports in the (aa) 2020-21, (bb) 2021-22 and (cc) 2022-23 financial years, (b) who were the suppliers in each case and (c) what total number of copies of the report were printed (i) in each case and (ii) in each specified financial year?”

Reply:

I have been advised that:

(i) Department of Small Business Development (DSBD) annual reports for printed copies:

Financial Years

(a) Amount

(b) Suppliers

(c) Number of Copies

(aa) 2020-21

R128 495,25

Shereno Printers CC

10 copies printed (240 pages +4pp Cover A4 Report pages per copies)

(bb) 2021-22

R74 800,00

Talking Heads Advertising (PTY)

10 copies printed (204 pages +4pp Cover A4 Report pages per copies)

(cc) 2022-23

R74 800,00

Talking Heads Advertising (PTY)

Order issued and not yet paid.

10 copies printed (204 pages +4pp Cover A4 Report pages per copies)

Total Paid

  1. R203 295.25

Total paid plus order issued not yet paid.

  1. R278 095.25

(ii) Small Enterprise Development Agency (Seda)

Financial Years

(a) Amount

(b) Suppliers

(c) Number of Copies

(aa) 2020-21

R 84,318.00

Msomi Puisano t/a Msomi Africa

200 print copies (210*210mm)

(bb) 2021-22

R 59 850,00

Blackmoon Advertising

100 print copies (210*210mm)

(cc) 2022-23

R 69 500.00

Kashan Advertising

100 print copies (270*270mm)

Total Paid

  1. R144 168.00

Awaiting the Service Provider’s invoice

  1. R 69 500.00

(ii) Small Enterprise Finance Agency (sefa)

sefa did not print Annual Reports over the financial years, 2020/21, 2021/22 and 2022/23. sefa used the services of Yes Direct Pty Ltd in FY2020/21 and Interactive Web Works (IWW) CC during FY2021/22 and FY2022/23 to layout, edit and design the Annual Report and produce the final Annual Report in electronic format.

Financial Years

(a) Amount

(b) Suppliers

(c) Number of Copies

(aa) 2020-21

R344 736.33

Yes Direct Pty Ltd

None.

(bb) 2021-22

R324 656.50

Interactive Web Works (IWW) CC

None.

(cc) 2022-23

R123 061.00

Interactive Web Works (IWW) CC & EPI Creative (Pty) Ltd

None.

Total Paid

  1. 715 392.83

Awaiting service provider’s invoice

  1. R77 061.50

30 October 2023 - NW2913

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Mathulelwa, Ms B to ask the Minister of Small Business Development

What (a) total number of rural cooperatives has her department supported in each province over the past five financial years and (b) are the reasons that her department seems to be reluctant to fund cooperatives in the country?”

Reply:

I have been advised that:

a) The following is an account of the interventions by the Department of Small Business Development (DSBD):

Trainings and workshops were provided in rural areas to 109 and 323 in the financial years 2023/24 (quarter 1) and 2022/23 respectively to co-operatives as part of non-financial support. The workshops focused on awareness campaign on the Co-operatives Development Support Programme (CDSP) and training on cooperative governance.

In order to popularise the CSDP, the Directorate plans to organise/facilitate/host a number of awareness /outreach campaigns across the nine provinces of the country. These campaigns also provide a platform for other stakeholders to make presentations on their product offerings, contributing to non-financial support. The table (attached as Annexure A) illustrates number of co-operatives attended presentation per province.

The implementation of amended CDSP guideline by the Small Enterprise Development Agency (Seda) increase financial support of co-operatives. With implementation gaining momentum, indeed more resources will be invested.

b) The DSBD, together with its agencies, Seda and the Small Enterprise Finance Agency (sefa), seek to assist co-operatives enterprises financially and non-financially. Seda, moving forward will be the lead Department for the implementation of CSDP, a financial support programme of the DSBD with an objective to support co-operative enterprises. Before CDSP was implemented through the agency, there was a Co-operative Incentive Scheme (CIS) that was managed at the Departmental and the approach was 90/10 to 100% grant then. Currently CDSP is administered by sefa as a blended finance of 70% (Grant) and 30% (Loan) for the past two financial years (2020/21 and 2021/22 financial years). To date no disbursement has been made due to sefa application process and requirements e.g., verification of members credit records, FICA documents etc.

In partnership with Seda, the CDSP programme to offer support to various categories to eligible co-operatives. Currently funding is limited to R2,500,000 (across the various categories). CDSP guideline has since been amended and the following are the proposed funding components to the various categories:

  1. Category A: Start-up Co-operatives: Maximum funding of R1 500 000 per applicant.
  2. Category B: Expansion Co-operatives: Maximum funding of R2 500 000 per applicant.
  3. Category C: Secondary/Cluster Co-operatives: R5 000 000 per applicant.

The implementation of amended CDSP guideline by Seda increase financial support of co-operatives. With implementation gaining momentum, indeed more resources will be invested.

30 October 2023 - NW2912

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Mathulelwa, Ms B to ask the Minister of Small Business Development

What (a) has she found to have been the lessons her department has learnt from the COVID-19 period in terms of the role it should play in supporting informal traders in township and rural areas and (b) interventions has her department made to ensure that it would be in a better position to assist informal traders during a natural disaster?’’

Reply:

I have been advised that;

aThe key lessons learnt by the Department Small Business Development (DSBD) from the COVID-19 period in terms of its role in supporting informal businesses located in townships and rural areas can be categorised according to the needs of these businesses as short-term and long-term needs.

Short-term needs relate to the support that was required by informal businesses to recover from the impact of the COVID–19 pandemic and related lockdown measures which are:

  1. Financial support – more than half of informal business owners indicated that they were in need of financial support just to be able to remain in business.
  2. Support with marketing and customer acquisition – a large number of informal businesses sought ways to market their businesses and to increase their customer base under the prevailing circumstances.
  3. Help to comply with hygiene standards – many of the businesses were looking for ways to keep their businesses safe and hygienic and to comply with the COVID-19 regulations.
  4. Mentoring and training – some of the informal businesses that received support also requested to receive ongoing mentoring and further training.

Formal businesses during the COVID-19 pandemic were more likely to receive support from Government programmes while entrepreneurs in the informal economy relied mainly on Social Grants. Long-term needs indicated to us as the DSBD that the COVID-19 pandemic has opened multiple opportunities to strengthen informal and micro businesses in the long term in the following areas:

  1. Use of digital channels and technology – many informal businesses see potential in the use of social media for marketing but the high cost of data remains the leading obstacle.
  2. Collaboration with peers and more established organisations – many would like to sell products or services to more established businesses while others feel they will benefit from introductions and advice on how to work with them.
  3. Transitioning from the informal to the formal economy – many would register their informal businesses if it helped them to access funding and grow their customer base.
  4. Improve overall infrastructure and create an enabling environment – a number of informal businesses reported poor access to basic infrastructure while others reported challenges with authorities around places where they operate their informal businesses.

b) The COVID-19 pandemic has opened multiple opportunities to strengthen informal businesses in the long run. The Department continues to address the lessons learnt through its current programmes and by developing appropriate responsive interventions within the Small Business Development Portfolio (DSBD, Small Enterprise Development Agency and Small Enterprise Finance Agency) and through partnerships.

  1. The Department of Small Business Development designated the informal business sector as a significant contributor to the country’s gross domestic product (GDP), employment creation, sustainable livelihoods and local economic development in the country. The National Informal Business Upliftment Strategy (NIBUS) was developed as a responsive strategy to this position. The Strategy is aimed at supporting informal businesses, which are mostly based in township and rural areas, to ensure that they become part of the economic mainstream of the country and to receive all the necessary support to ensure their growth and well-being.
  2. The Informal and Micro Enterprise Development Programme (IMEDP), Shared Economic Infrastructure Facility (SEIF), Township and Rural Entrepreneurship Programme (TREP) and others are instruments of the Department that were developed as part of the Strategy continue to play a role in dealing with current challenges faced by informal businesses and in achieving the objectives of government where support to informal businesses is being prioritised. The instruments of the DSBD together with its programmatic interventions as implemented by the DSBD and its entities, Seda (non-financial support) and sefa (financial support) will continue to be positioned and used as interventions to ensure that the DSBD will always be in a position to assist informal businesses during natural disasters and at all other times.

30 October 2023 - NW2676

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Kruger, Mr HC to ask the Minister of Small Business Development

Whether, in light of the Auditor-General’s 2020/2021 report revealing that 84% of municipalities fail to adhere to the standard 30-day payment guideline which puts immense financial strain on small companies, sole proprietors and cooperatives, her department has undertaken an in-depth analysis of the potential job losses and economic dislocation, the failure could engender within the specified economic units; if not, why not; if so, what (a) are the pertinent details of the findings and (b) plans does her department have to support these entities, considering the cash flow difficulties they face due to late payments from municipalities?”

Reply:

I have been advised that:

a) The Department of Small Business Development (DSBD) has not undertaken an in-depth analysis of the potential job losses and economic dislocations caused by the failure of municipalities to pay service providers within the prescribed 30 days payment period.

However, the Department has prioritised the research and investigations to assess a broader structural impediment faced by Small, Medium and Micro Enterprises (SMMEs) and Co-operatives relating to:

  • Access to finance.
  • Non-financial support from Government and Private sector.
  • Legal impediments to SMME and Co-operatives development; and
  • Access to Markets.

In addition to the above and emanating from an investigation into regulatory impediment affecting SMMEs, DSBD is to engage with National Treasury on improving monitoring, reporting, enforcement and consequence management. National Treasury has set up an email, [email protected] for service providers to register complaints payments older than 30 days. DSBD is to increase awareness of this platform to SMMEs through its Red Tape Reduction Programme at the Provincial and Municipality levels. DSBD further intends to investigate the possibility of expanding the current Innovation Bridge Portal project to include a platform for registration of complaints on adherence to the 30-day payment period commitment of Government to SMMEs.

The Department has recently introduced the National Small Enterprise Amendment Bill to Parliament, which is currently out for Public Hearings, this Bill aims to remedy the lack of effective and affordable access to a justice mechanism for small enterprises in instances of business to business disputes or non-payment of enterprises on time. The establishment of an Ombud Service will bring justice in this instance for SMMEs without them incurring costs.

b) These are part of a holistic Research Agenda for the 3-year cycle (2023/2026) to advance the development, job creation and job preservation for those SMMEs and Co-operatives that are still battling under the current economic strains and loadshedding. It is expected that two (2) studies, (1) Sector Specific support: challenges and opportunities and (2) Market Access: Demand for Goods and services post Covid-19, will be completed by the end of the 2023/2024 financial year. These will provide the Department with the basis for evidence driven interventions to support SMMEs and Co-operatives.

The work on Red Tape Reduction with the Provincial and Local governments ongoing with Provincial Task Teams set in place to raise awareness on the Red Tape Reduction commitment made by the President to improve the operating environment of Government and its stakeholders. It is expected that these interventions and investigations will provide the Department with leverage to engage municipalities to address the issues of non-payment and other non-financial impediments faced by SMMEs and Co-operatives.

31 August 2023 - NW2507

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Mathulelwa, Ms B to ask the Minister of Small Business Development

In light of how small businesses and/or co-operatives are struggling to access funding from her department, what total number of businesses did she develop in her hometown since the start of her term of office?”

Reply:

My Hometown is Mthatha, in the King Sabata Dalindyebo Municipality, since the 1st August 2021 I have been advised that;

The Small Enterprise Finance Agency (sefa) funded 5901 Small Micro and Medium Enterprises (SMMEs) in King Sabata Dalindyebo Municipality (KSD) to the value of R79.5 million. This financial support helped create and sustain 4963 jobs. In terms of developmental impact, sefa’s disbursements to businesses owned by black entrepreneurs were R79.5 million, women-owned businesses received disbursements to the value of R28.5 million, the youth owned businesses received R19.5 million in disbursements and those based in the rural areas received R49.5 million over the same period. And this covers small business in both Mqanduli and Mthatha my hometown.

The Small Enterprise Development Agency (Seda) service delivery is geared on a provincial focus with District Municipalities as it’s networks for reach and access of services. From 2021 when I was appointed as the Minister of the Department of Small Business Development (DSBD) to date, Seda Eastern Cape (EC) supported 8516 SMMEs and Co-operatives of which 1706 are residents of OR Tambo District Municipality. These numbers pertain to non-financial support provided to SMMEs and Co-operatives by Seda EC and exclude support provided by various other ecosystem stakeholders.

Seda’s impact is not only based in the Minister’s hometown but rather regional. For the 2023 financial year in the Eastern Cape, the Seda Technology Programme currently supports fourteen (14) Incubators in the Eastern Cape. Twenty-seven (27) clients were funded through the Technology Transfer Assistance Programme at a total cost of R14 296 665.00. Furthermore, five (5) clients were supported with quality and standards interventions at a total cost of R237 103.97.

Annexure 1

The attached annexure illustrates Seda’s financial and non-financial support in the Eastern Cape Province:

Seda Eastern Cape clients

Newly Approved Incubators

A picture containing text, screenshot, font, line

Description automatically generated

Quality and Standards Beneficiaries

Technology Transfer Assistance Beneficiaries

31 August 2023 - NW1880

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Luthuli, Mr BN to ask the Minister of Small Business Development

What other steps has her department taken to ensure that the most remote rural areas and secluded persons are aware of and able to benefit from the services offered by her department, when her department hosts outreach programmes that are aimed at showcasing and giving information regarding the services that it offers available to a wider audience as these outreach programmes are rarely held in the specified areas, and that means that persons who need the services are still unable to access them despite Government trying to do so by reaching out once or twice a year?”

Reply:

The Department of Small Business Development and its agencies, Small Enterprise Development Agency (Seda) and Small Enterprise Finance Agency (sefa), from time to time participate in Municipal LED Forums organised by the Municipalities in various Provinces across the Country. This includes Business Forums, Imbizos, Summits / Conferences, Community Outreach Programmes as well as Road Shows. The DSBD uses these platforms to share information regarding the services that are available to SMMEs and Co-operatives. The Department also utilises Seda and sefa offices across the country to share information regarding the services of the Department and its agencies.

Furthermore, and in line with the District Development Model (DDM), the Department had in the past financial year assigned senior and middle managers, from Acting Deputy Directors-General to Deputy Directors to all districts and provinces to act as both the provincial and district champions wherein they ensure continuous engagement with districts and municipalities to expose and enable SMMEs to access the services and programmes of the Department. The Department has taken this further by bringing in personnel, additional to the establishment, to link with the districts directly to take forward the work of DDM.

18 July 2023 - NW1933

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Mathulelwa, Ms B to ask the Minister of Small Business Development

On what date is it envisaged that she would follow up on the tools of trade that she distributed to informal traders last year in the Eastern Cape?”

Reply:

I have been advised that:

A planned post-investment exercise by the Department of Small Business Development (DSBD) will be undertaken once all the planned handovers for the targeted districts have been concluded. This approach allows for a more comprehensive undertaking that begins to direct government efforts towards Provincial, District and Local Development Plans for the inclusion of supported beneficiaries.

This activity will be tied to programme assessment and the enhancement of the instruments that we develop in response to needs as identified by beneficiaries.

Assessments and post-investment monitoring will be conducted in the Eastern Cape by the department and Seda from the second quarter of the current financial year.

21 June 2023 - NW2118

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De Villiers, Mr JN to ask the Minister of Small Business Development

Whether her department has undertaken any impact assessment to determine to what extent the Department of Employment and Labour’s proposed sectoral determinations in terms of the Employment Equity Amendment Act, Act 4 of 2022, will impact on the competitiveness and viability of small businesses, especially in cases where small businesses may be compelled to prioritise the racial composition of their workforce over crucial skills and experience; if not, why not; if so, what are the relevant details of the (a) impact assessment and (b) findings thereof to date?”

Reply:

I have been advised:

(a)&(b) That the Department of Small Business Development (DSBD) has considered the potential impact of the sectoral determinations that may be made by the Minister of Employment and Labour. The understanding is that the determinations will be made in consultation with the relevant sectors and emphasis is placed on the determinations being focused on the employment of suitably qualified candidates. The consultation process will enable the sectors to contribute to the determinations and raise any issues that may affect the sectors adversely. Thus, the determinations will not be a unilateral decision by the Minister, but a decision based on a well consulted process. Moreover, designated employers will be provided an opportunity to submit representations to the Director-General and the Labour Court should they not be able to meet the set numerical goals and targets before any fine is imposed, as set out in the Regulations.

It is DSBD’s considered view that the conceptualisation of the sectoral determinations is not based on unreasonably changing the racial composition of workforces but ensuring the equitable representation of different races. It is not envisaged that small businesses will be negatively affected by the regulations, as any issues that may have an adverse impact on their competitiveness and viability will be considered, fairly.

It should also be noted that Small Businesses that employ less than 50 employees will be excluded from submitting annual EE reports to the Department of Employment and Labour. Therefore, Small Businesses are not affected by the sector EE targets.

19 June 2023 - NW2121

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Bagraim, Mr M to ask the Minister of Small Business Development

With reference to the assertion of the President of the Republic, Mr M C Ramaphosa, in the State of the Nation Address on 9 February 2023 that small- and medium-sized enterprises (SMMEs), cooperatives and informal businesses will drive growth and create jobs in the Republic’s ailing economy, (a) what are the reasons that she has not yet taken any steps to reduce regulatory impediments for SMMEs and cooperatives to make it easier for entrepreneurs to start businesses and (b) by what date does she intend to introduce amending legislation in this regard in the National Assembly?”

Reply:

I have been advised that:

a) In order to take steps towards reducing the regulatory impediments for SMMEs and Co-operatives, the DSBD in partnership with key stakeholders like South African Local Government Association (SALGA), the Department of Trade Industry and Competition (the dtic), Foundations and Think Tanks embarked on the following processes:

  1. Conducted extensive research and rapid literature review to- identify key regulatory impediments, analyse them and design best methods and interventions, as well as strategies that could be adopted to address those impediments.
  2. Through this research, the DSBD has identified 29 major regulatory barriers that this project will focus on the implementation of specific remedies, options, and reforms at National, Provincial and Local levels of government in the coming financial years.
  3. The findings of the research have been piloted in selected municipalities to test their efficacy.
  4. These findings were also used as a resource to support the work of the Red Tape Reduction Committee at the Presidency.

b) In the 2021-22 financial year period the DSBD started the process of reviewing the Businesses Act (No.71) of 1991 and the Licensing of Business Bill 2013 and will be introducing the Businesses Amendment Bill to Cabinet in the second quarter.

19 June 2023 - NW2107

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Tlhomelang, Ms KB to ask the Minister of Small Business Development

What (a) steps has her department taken to provide a path for women and youth, who are trying their best to provide for their families through small-, medium- and micro- enterprises and informal businesses, to enter the small business sector successfully and (b) type of resources including venture capital and/or starter packs are available to such entrepreneurs?”

Reply:

I have been advised:

(a)&(b) That During the 2022-23 financial year, the Department of Small Business Development (DSBD) developed the Gender, Youth and Disability (GEYODI) Strategy. The strategy was developed in consultation with stakeholders in the gender, youth and persons with disabilities ecosystem. The aim of the strategy is to mainstream women and youth participation in the mainstream economy. One of the objectives of this strategy is “to provide entry points for increased inclusion of women, youth and persons with disabilities into all SMME, co-operatives and informal businesses financial and non-financial interventions.” The GEYODI strategy is aligned with the revised 2019-24 Medium-Term Strategic Framework (MTSF) of minimum 40% target for women, 30% for youth and 7% for persons with disabilities in all programmes and interventions of the Small Business Development (SBD) Portfolio (the DSBD, the Small Enterprise Development Agency [Seda] and the Small Enterprise Finance Agency [sefa]).

 

Furthermore, the DSBD through Seda is administering the SheTradesZA Hub whose aim is to assist South African women entrepreneurs to increase their competitiveness and connect to regional, and global market. Some of the results that can be observed include the increase in jobs created and the increase in sales revenue.

The Department is collaborating with other stakeholders to transform the retail sector by ensuring that women entrepreneurs get opportunities to place their products on the shelves of major retails domestically and internationally. For example, we have major retails like Pick n Pay and Clicks stores that have listed some of the products from our beneficiaries.

The localisation programme that is the Small Enterprise Manufacturing Support Programme (SEMSP) programme has supported women entrepreneurs to commercialise their products in order to meet industry standard and quality.

The SBD Portfolio is supporting the Presidential 40% commitment – Women Economic Assembly (WECONA) by facilitating capacity building of women entrepreneurs to equip them to take up opportunities through government procurement processes. To date Seda has supported and trained more than 3000 women entrepreneurs from across the country through capacity building workshops.

The DSBD is also supporting women and youth who are operating in the informal sector through the Informal and Micro Enterprise Development Programme (IMEDP). The aim of the IMEDP is to empower informal businesses by allocating tools of trade to the value of R10 000 in order to build their asset base. These informal businesses are given an opportunity to formalise their businesses and participate in the mainstream economy. In the last financial year 2022/23 we have supported approximately 2500 women, youth and people with disabilities.

The Department is also rolling out the Youth Challenge Fund (YCF) whose purpose is to stimulate innovation amongst youth owned businesses. The primary objective of the programme is to provide the necessary financial support through sefa’s 50/50% blended finance and non-financial support through Seda’s Business Development Support service (BDS) to youth start-ups to promote innovation and enable them to acquire digital capability for competitiveness and viability. The Youth Challenge Fund seeks to provide financial and non-financial support to young entrepreneurs.

The following is a breakdown of financial support for women and youth during the 2022-23 Financial Year:

Measure

Annual Target

Q1 Achieved

Q2 Achieved

Q3 Achieved

Q4 Achieved

Year-to-date Achieved

% Achieved per annual target

Facilities disbursed to women-owned businesses

R801 million

R195 million

R212 million

R268 million

R253 million

R928.7 million

116%

Facilities disbursed to youth-owned enterprises

R601 million

R128 million

R157 million

R149.6 million

R130 million

R566 million

94%

19 June 2023 - NW2116

Profile picture: Kruger, Mr HC

Kruger, Mr HC to ask the Minister of Small Business Development

Whether her department is implementing any initiatives and/or programmes targeted specifically at fostering an entrepreneurial ecosystem in rural communities, given that entrepreneurship is a recognised catalyst for economic growth; if not, why not; if so, what are the relevant details?”

Reply:

I have been advised:

That the Department of Small Business Development (DSBD) is implementing the Township and Rural Entrepreneurship Programme (TREP) to foster an entrepreneurial ecosystem in rural and township communities. The TREP goal is to overcome the legacy of economic exclusion by creating a conducive environment for entrepreneurial activity and providing dedicated business support to enterprises in rural and township areas including access to funding. TREP supports all small enterprises operating in townships and rural areas to grow their businesses. The programme assists small enterprises with the acquisition of business-related equipment, tools or machinery and working capital. Furthermore, the DSBD is rolling out a network of incubators to ensure that Business Development Support is accessible to small enterprises and co-operatives operating in unserved and underserved areas such as townships and rural area.

Our financial products through Sefa also prioritise rural enterprises as seen in the Sefa disbursements below:

 

Audited Performance over the past financial years

 

2019/20

2020/21

2021/22

2022/23 (Estimated)

2023/24 (Target)

Disbursements to enterprises located in rural towns and villages (R’000)

R371 151

R563 051

R977 100

R766 765

R938 636

19 June 2023 - NW2117

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De Villiers, Mr JN to ask the Minister of Small Business Development

Whether her department has undertaken any review and/or study to determine the extent to which small-, medium- and micro enterprises (SMMEs) benefited from the African Growth and Opportunity Act (AGOA) agreement between the Republic and the United States of America; if not, why not; if so, (a) to what extent have SMMEs benefitted from the AGOA in the past three years and (b) what total number of jobs have been created and sustained due to the AGOA?”

Reply:

I have been advised:

The Department of Small Business Development (DSBD) has not undertaken a review as part of its research undertaking on the African Growth and Opportunity Act (AGOA).

The DSBD and the Department of Trade Industry and Competition (the dtic) participated in the South Africa-United States of America (SA-USA) meeting to discuss matters related to the AGOA. The US International Trade Commission (USITC) communicated that they will be conducting assessment on how (extent to which and the impact of) AGOA has assisted/supported growth in the Chemical and Textile Sectors (and other sectors); as well as domestic programmes (funding and capacity building) aimed at supporting Small and Medium-sized Enterprises (SMME) exporters.

AGOA is currently set to expire in 2025. SA is jointly with the African Union lobbying for extension beyond 2025. DSBD and the dtic will embark on a consultation process to formulate a country position on AGOA ahead of the negotiations to ensure that South African SMMEs interests are covered in the new agreement.

(a)&(b) Not applicable.

19 June 2023 - NW2128

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Luthuli, Mr BN to ask the Minister of Small Business Development

With reference to her announcement during her department’s budget vote that 2.5 million small-, medium- and micro-enterprises (SMMEs) currently employ almost 8 million people in the Republic, what are the details of the material support that her department offers to lessen this burden on struggling SMMEs as they often struggle to access and benefit from the services of agencies such as the Small Enterprise Development Agency?”

Reply:

I have been advised:

That the Small Enterprise Development Agency (Seda) has a wide footprint in the country that consists of fifty-three (53) branches and fifty-six (56) co-location points with the intention to widen access to Seda services in underserviced and rural South Africa. The Small Enterprise Finance Agency (sefa) is working with Seda in increasing awareness across various regions by deploying additional resource in Seda’s access points as well as co-locations. This will assist in addressing the issue of SMMEs travelling far to access Seda services. A Business Development Services mapping exercise has been undertaken to identify other stakeholders that are also providing similar services to establish partnerships with them and offer services on the entity’s behalf. Furthermore, to broaden the net wider, the use of virtual platforms is considered as an opportunity where Seda provides interaction opportunities for clients to attend online training and webinars. Seda has adjudicated seventy-eight (78) and signed contracts with fifty-two (52) access points during the 2022-23 financial year as shown below. Eighty (80) access points will be contracted by the end of the 1st quarter of the 2023/24 financial year.

Seda will continue to expand service delivery to rural communities through various modalities whilst striking a sound balance between community needs, budget availability and collaboration with ecosystem partners.

During the 2022-23 financial year, Seda has reached 68 117 SMMEs and Co-operatives through entrepreneurship awareness sessions throughout the country. Pop-Up Markets that are hosted in collaboration with our strategic partners also assist to raise awareness and promote the services and benefits offered by Seda. Seda organised 39 Pop-Up markets in 2022-23 financial year. Following are a few recent examples:

  • Seda Namakwa branch conducted their Pop-Up market from 28 February 2023 to 1 March 2023 where various clients exhibited their products and services. Eighteen (18) exhibitors were in attendance.
  • Seda ZF Mgcawu branch hosted the Pop-Up Market from on 2-3 March 2023 in Upington.
  • The Nkangala Branch held a Pop-up market on 17 March 2023, in Delmas, and twenty-five (25) SMMEs exhibited their products and services in partnership with Victor Khanye Local Municipality and Standard Bank.
  • Seda Limpopo hosted a Pop-Up market in collaboration with the Groblersdal Mall in February 2023.
  • The Mopani Branch in conjunction with the district and local municipalities hosted two (2) Pop-up markets and one (1) in Waterberg on 31 March 2023.
  • Small Business Development Portfolio (DSBD, Seda and sefa), in collaboration with Exxaro, hosted a three-day mall activation at Lephalale Mall, Limpopo, from 24-26 March 2023. Twenty-two (22) local entrepreneurs from the manufacturing, arts and craft, agriculture, and service sector participated in the exhibition.
  • Pop-Up markets were held in the Brits Mall with ten (10) SMMEs and Letlhabile Mall with fifteen (15) SMMEs exhibiting. Both events were held on the 31 March 2023 and ending on 1 April 2023.

During the 2022/23 financial year, Seda trained more than fifteen thousand one hundred and nineteen (15,119) SMMEs on various programmes and courses. These includes courses amongst many other Basic Business Skills, Business Start-Up 1, Cybercrimes, Hazard Analysis Critical Control Point (HACCP) Awareness, Food Safety, Quality Management System (QMS), SARS Incentives, Export Awareness, Costing, Empretec, Business Planning, Business Model Canvas, Community Public Private Partnership, Art of Pitching, Customer Care, Retail Management, Design Thinking, Green Economy, etc. Training are needs based and often presented in collaboration with our partners. Below are a few examples:

  • The Seda ZFM branch conducted a 3-day Farm management training with small scale farmers in the small-town agricultural town of Keimos. The training helped by upskilling them on the management activities and responsibilities involved in running an agri-business. Basic activities involved in the agri-management process were explained by providing examples and scenarios.
  • Seda Thabo Mofutsanyana Branch partnered with the Department of Correctional Services with the aim of developing a capacity program for inmates based in Bethlehem prison. The Provincial Regional Facilitator conducted self-mastery training attended by twenty-seven (27) inmates over 3 days.
  • Free State Department of Economic, Small Business Development, Tourism and Environmental Affairs (DESTEA) in partnership with the Motheo TVET College hosted a Financial Symposium on 8 March 2023 in Bloemfontein. The Seda Provincial Office and Mangaung Branch, together with sefa, attended the session with other stakeholders namely, Nedbank, NEF, and the Department of Trade Industry and Competition (the dtic) to present offerings to the audience. Ten (10) Seda clients from the district exhibited their products and services.
  • Seda Joburg Branch collaborated with EkasiLab from the Innovation Hub to roll out design clinic training in Soweto and Kagiso for approximately thirty (30) Small Businesses. Seda covered the cost of training and EkasiLab provided venues and catering.
  • Seda Gert Sibande Branch has partnered with Coca-Cola to train fifteen (15) businesses. The training took place in February 2023. Coca-Cola offers a three(3)-meter container valued at R150 000 and a Fridge to the Spaza Shops in rural and township areas.
  • The Innovation and Technology unit of the the dtic, DSBD in partnership with Seda Thabo Mofutsanyana Branch invited prospective entrepreneurs with innovative ideas from Setsoto and Dihlabeng Local Municipalities to attend the innovation workshop. The workshop was held in Bethlehem and Ficksburg (Ntsu Secondary School, Comp High School, Seda Bethlehem office and Ficksburg hall) from 14-15 March 2023. The purpose of the workshops was to unearth technologies from the communities and townships of the district, create networking platforms for technology development and commercialisation and present technology offerings of the the dtic. More than a hundred (100) participants attended the session in four (4) different venues including two high schools in Bethlehem.

Seda has an Export Orientation Course (EOC) which focuses on Export Development. These courses focus on the business with the aim of helping the business assess its export readiness. The training targets SMMEs that have the intention and the potential to enter the export business or those already involved in exports but wanted to strengthen their knowledge in this field of business.

The SheTrades programme is a partnership between the International Trade Centre (ITC), DSBD and Seda to promote Women’s Entrepreneurship. ITC SheTrades has set up a Hub in South Africa to help South African women entrepreneurs increase their international competitiveness and connect to national, regional, and global markets through the SheTradesZA Hub. The primary objective of the Hub is to connect at least 10 000 women owned businesses to markets by 2024. This is part of South Africa’s contribution to ITC's goal of connecting three million women entrepreneurs to markets by 2023.

A total of 3003 women have registered as at the end of March 2023. Through the programme, women-owned businesses will be able to:

  • Connect to potential buyers, investors, suppliers, business support organizations and SheTrades partners.
  • Learn skills to boost business potential through free e-learning courses, on-site workshops, and webinars.
  • Receive support to attend national, regional, and international trade fairs.
  • Get chances to participate in B2B meetings.
  • Access to investment opportunities.
  • Increased visibility and larger network in international markets.

Seda has also forged three key skills development partnerships namely:

  • A 3-year partnership with the National Skills Fund (NSF) to benefit 14 000 beneficiaries for a total budget of R 592 275 000. The aim of the project is to recruit unemployed graduates with Accounting and Business Management qualifications to be trained on New Venture Creation, Coaching, and Mentorship Programme to enhance their skills to provide support to Micro Enterprises. Seda will use coaching as an innovative methodology to facilitate and reinforce learning and development support to Micro Enterprises and the unemployed graduates will be trained on new venture creation as well as business coaching to enable them to transfer skills & knowledge to Micro Enterprise owners.
  • Seda and W&R Seta signed an agreement to support one thousand (1000) Tuckshops, General Dealers to the value of R 9 975 000.
  • In 2021, DSBD, Seda and Merseta signed Agreement for Merseta to release a discretionary grant to Seda to the value of R 50 million. The funding will be provided in phased approach over a 3-year period. The purpose is to train Small Enterprise in the Automotive Trade Sector as well as facilitate Artisan Recognition of Prior Learning (ARPL).

In addition to the above, Seda through its Learning Academy has also developed different training programmes. These programmes are credit bearing and accredited by the Services Seta. Quality training aims to assist organisations of all types to implement and operate the QMS to increase effectiveness, consistency, and customer satisfaction, explain the benefits of implementing QMS and understand the quality, management principles. Whilst Food safety introduces Food Safety, Understand Pre-Requisite programme, HACCP and HACCP principles and Implementing a Food Safety Management System (SANS 22000:2019.).

Seda has an Entrepreneurship in Schools Programme that encourages learners to consider entrepreneurship as an alternative career to employment. The main objective of the programme is:

  • To influence the mindset of learners by encouraging them to become job creators instead of job seekers once they leave the schooling system.
  • To equip learners with entrepreneurial knowledge and skills needed to start and manage their businesses; and
  • To improve entrepreneurial activity amongst the learners and educators.

Seda is also in partnership with the United Nations Conference on Trade & Development’s (UNCTAD)

Division of Investment and Enterprise United Nation’s Empretec training Programme.

  • Empretec is a six (6) day programme aimed based on a unique Harvard University methodology focusing on behavioural approach to entrepreneurship.
  • The programme is interactive, experience and self-assessment based and takes 25-30 participants per workshop. Participants learn by doing.
  • Participants on this programme receive an UNCTAD endorsed certificate.
  • Programme develops Personal Entrepreneurial Competencies (PECs) such as opportunity seeking, persistence, goal setting, risk taking, fulfilling commitments, planning etc. for participants.

Seda has a dedicated programme, The Basic Entrepreneurship Skills Development (BESD) which was jointly developed by Seda and German Federal Ministry for Economic Cooperation and Development via Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) since 2012. GIZ left the programme in December 2016. The programme is funded by the National Skills Fund for an amount of R84 million. The BESD approach utilises coaching as an innovative methodology to facilitate and reinforce learning and development support to emerging entrepreneurs. A total of 260 undergraduates and 1998 Emerging Entrepreneurs successfully completed the training initiative.

19 June 2023 - NW2142

Profile picture: Luthuli, Mr BN

Luthuli, Mr BN to ask the Minister of Small Business Development

Whether, considering that the former Minister shared in her Budget Vote of 2017 that in the 2016-17 financial year the Small Enterprise Finance Agency (SEFA) disbursed just over R1 billion to small-, medium- and micro enterprises and co-operatives, which benefited approximately 44 000 enterprises, although for the third quarter of the 2022-23 financial year SEFA approved R249 million in loans and disbursed only R550 million in loans, thereby achieving only 41% of its performance targets, she has assessed this as a regression in her department; if not, what is the position in this regard; if so, what are the relevant details?”

Reply:

I have been advised that:

The table below outlines the Small Enterprise Finance Agency (sefa) loan book performance in the referenced years:

Financial Year

Approvals

Disbursements

# of SMMEs Financed

# of Jobs Facilitated

FY2016/17 (Audited numbers)

R827 million

R1, 076 billion

43 211

55 997

FY2022/23 (un-audited numbers)

R1, 706 billion

R2, 427 billion

74 762

104 547

So, it is clear that Sefa has not regressed – infact it has more than doubled its disbursements from 2016/17 to 2022/23 . To break down this further and for the financial year ending 31 March 2023, the Minister indicated in her budget speech that sefa through its development finance interventions and programmes, cumulatively financed 74 762 SMMEs and Co-operatives and disbursed R2.4 billion to these enterprises.

Through these disbursements, sefa was able to reach:

• 74 486 black owned SMMEs to the value of R2.1 billion.

• 15 535 youth owned SMMEs to the value of R564 million.

• 72 651 women owned SMMEs to the value of R928 million.

• 2 953 township based SMMEs to the value of R541 million.

• 66 302 rural-based SMMEs to the value of R952 million.

Collectively, these funding interventions have created 32 665 new jobs and sustained 71 882 existing jobs.

This performance is by no means reflecting a regress in the performance of sefa at the end of the financial year ending in 31 March 2023.

19 June 2023 - NW2216

Profile picture: Bagraim, Mr M

Bagraim, Mr M to ask the Minister of Small Business Development

With reference to the President of the Republic, Mr M C Ramaphosa, acknowledging in the recent State of the Nation Address that the Government does not create jobs, but merely has to create the environment for businesses to create jobs and that it was small business that would be creating the majority of jobs needed to kick-start job creation in the Republic, but that nothing has yet been done to tackle the onerous labour legislation and regulations to free up small businesses to create jobs, (a) what are the reasons that nothing has been done and (b) on what date does she intend to tackle the onerous regulatory environment?”

Reply:

I have been advised that:

a) As means of addressing the onerous labour legislation and regulations to free up small businesses to create jobs, the Department of Small Business Development (DSBD) has activated several interventions which include, undertaking a dedicated exercise to identify and review legislation and reforms that impede on Small, Micro and Medium Enterprises (SMMEs) and co-operatives’ growth. The update has so far embarked on the initial process of consultations focused on the primary users of this legislation namely, municipalities who are the sphere of government that must implement business licensing by-laws. A total of 29 pieces of regulatory impediment legislations have been identified across the three spheres of government that will culminate with a clear implementation and action plans for action. This exercise was conducted in partnership with key stakeholders in the ecosystem. These stakeholders include but not limited to the following:

  • Departments of Economic Development across all nine (9) provinces.
  • South African Local Government Association (SALGA).
  • The Social Protection Community and Human Development Cluster.
  • Department of Cooperative Governance and Traditional Affairs (COGTA).
  • Department of Home Affairs.
  • Districts and local municipalities.

The DSBD is also implementing the initiatives that are also aimed at lessening regulatory barriers for SMMEs and co-operatives which the Pilot Administrative Simplification Programme (PASP) and Municipal Performance Monitoring. The program aims to ease the strain that prolonged processing delays have on businesses and public resources. Administrative simplicity will help with process improvement at municipality level. The initiative entails exposing the municipality stakeholders and users to a five (5) days’ workshop for optimisation of processes. Some of the municipalities that have already benefitted from this initiative include amongst others, the Ray Nkonyeni (Ugu District), Ubuhlebezwe (Harry Gwala District), and the City of Umhlathuze Local Municipalities (King Cetshwayo District). The Department is also:

  • In the process of developing a Municipal Red-tape-Reduction Dashboard which will support Municipalities to track all the administrative bottlenecks for urgent attention.
  • Rolling out the Red Tape Reduction Awareness workshops whose purpose is to create awareness and instil the culture of intolerance towards red tape. A total of twenty-five (25) municipalities have already participated in these workshops during the 2022-23 financial year.
  • Hosting the Inter-Provincial Task Team (IPTT) on red tape reduction and ease of doing business. The IPTT is a quarterly platform for the DSBD, Provincial Departments of Economic Development, COGTA, Red-Tape Reduction Committee at the Presidency, key entities to SALGA to identify and discuss approaches to address systematic red tape issues that impacts SMMEs / co-operatives. This platform is also utilised to exchange best practices, foster peer learning, and build a community of best practice, this session is hosted quarterly. As a result, important sectoral problems for action are escalated for action. So far, about sixteen (16) IPTT meetings and workshops were held during. Some of the successes of the IPTT include amongst others, addressing bottleneck in the National Department of Transport policies of clearing the backlog in the tourism operating license applications. Over two hundred and twenty-seven (227) renewals have been processed.

b) The DSBD has already started an in-depth review of the regulatory barriers affecting small enterprises and the urgent need for regulatory change regarding the Businesses Act of 1991 and the Licensing of Business Bill. The Department has, so far, determined that there are twenty nine regulatory impediments that need to be addressed at the national, provincial, and local levels of government in the upcoming fiscal years. This project will concentrate on implementing these specific remedies, options, and reforms across the three spheres of government. The Businesses Amendment Bill that addresses some of the regulatory impediments will be presented to Parliament during the current financial year (2023-24). After the review of the twenty nine regulatory impediments the an implementation plan will be developed and presented to Cabinet after consultations have been finalised with the affected institutions by the end of the current financial year.

13 June 2023 - NW2080

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Luthuli, Mr BN to ask the Minister of Small Business Development

(1)Whether her department has the exact figures of the total number of small-scale businesses that have had to close shop due to load shedding; if not, (a) why not and (b) how is her department able to assess the (i) total amount and (ii) kind of assistance small, medium and microenterprises (SMMEs) need to tackle issues related to load shedding; if so, what are the relevant details; (2) (a) on what dates has her department consulted with SMMEs when designing projects to tackle issues and/or challenges that they are faced with since her appointment as Minister of Small Business Development and (b) what measures have been put in place to record the data emanating from the consultations for use of her department in its assessments?” NW2352E

Reply:

1. The department acknowledges the impact of load shedding across country which has led to some SMMEs closing down their operations while others decline in performance. The Small Enterprise Agency (sefa) conducted a dipstick survey on SMME’s it has funded to try and understand the impact of loadshedding on their operations. From the results of the survey, there was no client that indicated that they closed their doors permanently due to loadshedding. However, businesses showed that they experienced adverse effect of loadshedding on their businesses. Many clients, especially those in the manufacturing sector indicated that they are losing production while others have lost revenue.

2. The standard procedure followed when designing funding instruments is to conduct research to understand what else is offered in the market for an example, in designing the latest loadshedding relief scheme (Power Purchase Products), offerings from the Department of Trade Industry and Competition (the dtic) – through the National Empowerment Fund (NEF), Department of Mineral

3. Resources (DMRE), Department of Forestry, Fisheries and the Environment (DFFE), and National Treasury were consulted. Furthermore, the relevant industry bodies and/or business formations such as Council for Scientific and Industrial Research (CSIR), Technology Innovation Agency (TIA) were consulted in order to design products that are needs based. The meetings normally take place virtually, so the recordings of these meetings are kept as evidence of these consultations.

Generally for other instruments the Department does conduct site visits to engage with the affected enterprises for example when the provinces of KwaZulu Natal and Eastern Cape were affected by loadshedding as the Minister together with officials we visited the SMMEs to see and also find out directly from them what kind of support they require for them to recover and get back to operation. Also the Provincial Roadshows which we hosted across the country in the last financial year played a very critical role in relooking at the existing instruments and adjusting them to fit with the needs of small enterprises. The Roadshows reports were recorded and are kept in the Department.

13 June 2023 - NW2010

Profile picture: Mthenjane, Mr DF

Mthenjane, Mr DF to ask the Minister of Small Business Development

What are the reasons that the Small Enterprise Finance Agency as a development finance institution is enabling intermediaries to exploit the marginalised through exorbitant interest rates?”

Reply:

I have been advised as follows:

That the interest rates between the Micro Finance Institutions (MFIs) and their clients are governed by the National Credit Act (NCA). All the Small Enterprise Finance Agency (sefa) funded MFIs charge interest rate that is within the rates prescribed by the NCA. However, both the clients and sefa acknowledge that the current rates are higher than what would be preferable, and sefa and its developmental clients are in the process of developing a sustainable way forward on rates and charges that bears in mind the MFIs’ need to be financially sustainable and the entrepreneurs’ need of finance at the best possible rates.

13 June 2023 - NW2009

Profile picture: Mthenjane, Mr DF

Mthenjane, Mr DF to ask the Minister of Small Business Development

What total number of (a) spaza shops in the Republic were affected by the failure of the Small Enterprise Finance Agency to disburse the full R10 500 to its intended beneficiaries and (b) beneficiaries have received their payments to date in each province?”

Reply:

I have been advised as follows:

a) As at 30 April 2023, the total outstanding Spaza Shops Support Programme (SSSP) beneficiaries who had not yet received the additional R7 000 grant were 504 nationally. During the month of May 2023, 426 beneficiaries of SSSP received their additional R7 000, and this has been confirmed with Nedbank. This means that to date only 78 beneficiaries are yet to receive their additional R7000 grant and the process to disburse these funds is underway.

b) Provincial breakdown of SSSP performance

Spaza Shop Support Programme Provincial budget allocation

Province

SPAZAS & General Dealers Per Province

Budget Rands

No . of approvals R3500

No . of approvals R10500

No. of top ups R7000

Amount committed to Spazas (R)

Budget balance (R)

Total EC

3 200

11 222 445

716

44

662

7 602 000

3 620 445

Total FS

1 430

5 015 030

232

107

205

3 370 500

1 644 530

Total GP

5 370

18 832 665

322

375

299

7 157 500

11 675 165

Total KZN

5 000

17 535 070

2473

269

2256

27 272 000

- 9 736 930

Total LP

2 690

9 433 868

1224

121

1125

13 429 500

- 3 995 632

Total MP

2 110

7 399 800

197

71

157

2 534 000

4 865 800

Total NC

840

2 945 892

72

48

70

1 246 000

1 699 892

Total NW

1 840

6 452 906

105

30

88

1 298 500

5 154 406

Total WC

2 470

8 662 325

99

55

74

1 442 000

7 220 325

TOTAL

24 950

87 500 000

5 440

1 120

4 936

65 352 000

22 148 000

It should be noted that the 426 beneficiaries that received the additional R7 000 in May 2023 are yet to be added to sefaLAS (sefa’s loan electronic system). The system periodically runs updates and the updated information should be available by mid-June 2023.

13 June 2023 - NW2008

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Mthenjane, Mr DF to ask the Minister of Small Business Development

(1) What are the reasons for the Industrial Development Corporation (IDC) to move rapidly towards operating in the small, micro and medium enterprises wholesale lending when the Small Enterprise Finance Agency (SEFA) has been in operation in the sector for more than a decade. (2) whether the specified move is a sign that SEFA is struggling to fulfil its mandate; if not, what is the position in this regard; if so, what are the relevant details. (3) whether SEFA should be dissolved, and its functions transferred to the IDC; if not, why not; if so, what are the relevant details?”

Reply:

I have been advised as follows:

  1. The Industrial Development Corporation (IDC) is an agency under the Department of Trade, Industry and Competition (the dtic). The department has not been apprised of Industrial Development Corporation’s motive to move into the SMME wholesale lending.
  2. As indicated under (1) above, the motive for the move is not known to DSBD. However, sefa has been delivering on its mandate. To date, since its establishment in April 2012, sefa has disbursed R9.5 billion into the South African economy via the Wholesale Lending channel, supporting 629 971 SMMEs and Co-operatives, who in turn helped create and sustain 767 551 jobs.
  3. The DSBD is currently undertaking a process of merging sefa and Co-operative Banks Development Agency (CBDA) into the Small Business Development Agency (Seda). The establishment of the new entity will give effect to a Cabinet decision to enable and provide for integrated government support (both financial and non-financial) to small enterprises, which are defined as including Co-operatives.

13 June 2023 - NW2003

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Mathulelwa, Ms B to ask the Minister of Small Business Development

What recent interventions has she put in place to combat the rising trends of corruption in the Small Enterprise Finance Agency that are witnessed across the Republic?”

Reply:

I am advised as follows:

The Small Enterprise Finance Agency (sefa) takes fraud and corruption seriously. There are various mechanisms and strategies developed by (sefa) to inwardly address potential risk of fraudulent activities. One of these is the anti-fraud hotline at sefa with contact number 0800 000 663. Instances where corruption and fraud has been reported Sefa has instituted investigations and will act on the recommendations where our officials might have been involved.

13 June 2023 - NW1978

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Ceza, Mr K to ask the Minister of Small Business Development

What steps of intervention has she taken to prevent small businesses based in townships and owned by women and youth, from closing down as a result of power outages?”

Reply:

I am advised follows:

The Department of Small Business Development (DSBD) has put together a loadshedding relief package called the Power Purchase Product (PPP) to be implemented through its agency Small Enterprise Finance Agency (sefa). The PPP is financial package which aims to assist small and medium enterprises across South Africa who have been severely impacted by loadshedding. The programme will support these enterprises with a blended loan facility of up to R1 million. An amount of R 490 million is allocated inclusive of Seda support to product markets. The blended facility will be utilised for the acquisition of alternative energy sources as well as related working capital.

As part of our medium to long term strategy, a separate request was submitted to the National Treasury to allow non-Banking Financial Institutions such as the Khula Credit Guarantee to participate in the Bounce Back Scheme so that funding support to enterprises can be maximised.

26 May 2023 - NW1588

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Mthenjane, Mr DF to ask the Minister of Small Business Development

What (a) are the reasons for the reversal of the payment for computer services to Microsoft and (b) is the root cause of the reversal?

Reply:

a) I have been advised that the reversal in the payment was due to a difference of opinion, between Microsoft and the Department of Small Business Development, regarding the currency in which the payment needed to be made.

b) The Department made the payment to Microsoft in South African Rand, but Microsoft insisted on receiving the payment in US Dollars. The payment had to be reversed in order to make the payment in US dollars.

26 May 2023 - NW1587

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Mthenjane, Mr DF to ask the Minister of Small Business Development

(a) “What are the reasons for the overspending of 119,2% on claims projected for the second and fourth quarter but were paid in the third quarter of the financial year and (b) why was it necessary to pay the claims in the third quarter of the financial year, when they were projected for the second and fourth quarters?”

Reply:

a) What are the reasons for the overspending of 119.2% on claims projected for the second and fourth quarter but were paid in the third quarter of the financial year?

I have been advised that Departments are required in line with section 40 (4) of the PFMA Act No.1 of 1999 to provide National Treasury with a breakdown per month of the anticipated revenue and expenditure for the financial year, on the 28th of February, which is one month before the beginning of a financial year.

The National Treasury approved monthly cash flow projections are drawn down per month from April and kept in the departmental bank account referred to as the Pay Master General (PMG) account. Payments are processed once fully compliant documents are submitted to Finance.

The reason for the cashflow variance of 119.2% is the timing misalignment between actual cash disbursement and planned cash payout. Factors that contribute towards this misalignment are milestones in projects either being delayed or reached earlier than the cash flow. In instances of goods and services, it could also be due to early or late deliveries of orders.

Finance can only process transactions upon receipt of fully compliant supporting documents.

b) Why was it necessary to pay the claims in the third quarter of the financial year, when they were projected for the second and fourth quarters?

I have been advised that cash flow projections and plans are based on estimated values and dates. As part of cash flow management and compliance with Treasury Regulations 8.3.2, claims are processed within 30 days of receipt by Finance.

It should be noted that the utilisation of the available cash did not lead to overspending on the overall vote.

26 May 2023 - NW1586

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Mthenjane, Mr DF to ask the Minister of Small Business Development

(a) “What are the details regarding the cash flow misalignment relating to the Blended Finance Programme and the discontinued Gazelles Programme, (b) why was there a misalignment and (c) how was it discovered and corrected?”

Reply:

a) I have been advised that the Gazelles Programme was discontinued at the beginning of the 2022/23 financial year and by the time it was discontinued, a budget of R29.8 million was already allocated to this programme during the Estimates of National Expenditure (ENE) process and the related cash flow already approved by National Treasury.

b) A decision was taken to discontinue the Gazelles programme after the MTEF process had closed. The funds were originally allocated to Seda for the discontinued Gazelles programme, whilst a decision was taken to fund the Blended Finance programme – the Youth Start Up programme, which is implemented by sefa.

c) The misalignment was known at the beginning of the financial year as stated in (a) above and the corrective measure was to request and receive approval from national treasury. The approval was granted in November 2022. There was a two-month delay in getting the related cash flow approved. The cash flow approval was in January 2023. It needs to be noted that the department has not exceeded the overall allocated 2022/23 budget.

During the Adjustment Estimates of National Expenditure (AENE) process, DSBD requested for reprioritisation of the Gazelles allocated budget to the Youth start-up programme to be implemented by sefa under the umbrella of the Blended Finance line item. The reprioritisation was approved by National Treasury and the Department was requested to submit the revised cash flow by the 9th of January 2022.

The cashflow for the discontinued Gazelles programme was in November 2022 and it was decided that the available cash for this programme should be redirected to the Youth start-up programme to ensure that the new programme is not delayed any further. Waiting for the cashflow process to be finalised in line with National Treasury’s timelines was going to result in a delay of two months as the revised AENE cashflow was only approved on 23 January 2023.

26 May 2023 - NW1520

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Kruger, Mr HC to ask the Minister of Small Business Development

What steps is her department taking to raise awareness among rural entrepreneurs about the availability of the services and benefits offered by the Small Enterprise Finance Agency and Small Enterprise Development Agency to small businesses, particularly in terms of access to finance, business development support and skills training?”

Reply:

The Small Enterprise Development Agency (Seda) and Small Enterprise Finance Agency (Sefa) raise awareness of their products and services particularly in rural communities through entrepreneurship awareness sessions, these are organized by the branches of the entity and in collaboration with municipalities and private sector partners.

Our agencies also use community radio stations, social media platforms, sector specific webinars, and pop-up markets to expose their products and services. Seda will now also use its access points to send out information to the nearby communities particularly in the rural areas where there is no direct presence.

During the 2022/23 year, Seda trained more than fifteen thousand one hundred and nineteen (15,119) SMMEs on various programmes and courses. These includes courses amongst many other Basic Business Skills, Business Start-Up 1, Cybercrimes, HACCP Awareness, Food Safety, QMS, SARS Incentives, Export Awareness, Costing, Empretec, Business Planning, Business Model Canvas, Community Public Private Partnership, Art of Pitching, Customer Care, Retail Management, Design Thinking, Green Economy, etc. Training are needs based and often presented in collaboration with our partners.

As part of reclaiming components of the township economy Seda has also forged key skills development partnerships namely:

  • A 3-year partnership with the National Skills Fund (NSF) and W&R Seta to benefit 15 000 beneficiaries. The aim of the project is to recruit unemployed graduates with Accounting and Business Management qualifications to be trained on New Venture Creation, Coaching, and Mentorship Programme to enhance their skills to provide support to Micro Enterprises. Seda will use coaching as an innovative methodology to facilitate and reinforce learning and development support to Micro Enterprises and the unemployed graduates will be trained on new venture creation as well as business coaching to enable them to transfer skills and knowledge to Micro Enterprise owners..

In 2021, DSBD, Seda and Merseta signed an agreement for Merseta to release a discretionary grant to Seda to the value of R 50 million. The funding will be provided in phased approach over a 3-year period. The purpose is to train small enterprises in the Automotive Trade Sector as well as facilitate Artisan Recognition of Prior Learning (ARPL).

Furthermore, information is also provided through the Department of Small Business Development (DSBD), Seda and the Small Enterprise Finance Agency (sefa) websites and contact centres. The DSBD also participates in Municipal LED Forums organised by the Municipalities / Provincial and National Government in various Provinces across the country. These include Business Forums, Izimbizo, Summits / Conferences, Community Outreach Programmes, Road Shows and other programmes. The DSBD uses these platforms to share information regarding the services that are available to SMMEs and Co-operatives offered through sefa and Seda. Participants at these engagements are also directed to Seda and sefa offices that are found across the country to acquire further assistance regarding the initiatives of the Department and its agencies.

26 May 2023 - NW1519

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Kruger, Mr HC to ask the Minister of Small Business Development

How is (a) her department monitoring and evaluating the impact of the Small Enterprise Finance Agency and the Small Enterprise Development Agency’s services in rural communities and (b) it envisaged the information will be used to inform future policy and programme development around the area small business support?”

Reply:

a) In relation to evaluation, I have been advised that the Department of Small Business Development (DSBD) periodically conducts different types of programme evaluations depending on the life cycle of an intervention/project or a programme. Just an example, in 2021/2022 financial year, the Spaza Shop Support Programme (SSSP) was subjected to a process evaluation. The purpose of the evaluation was to assess the effectiveness of the SSSP and to determine if the programme is achieving its intended objectives. The recommendations(information) derived from the evaluation were used to inform the programme review, enhance performance, and leaning. Furthermore, I have been advised that the department is finalising an impact evaluation of the Incubation Support Programme (ISP). The purpose of the impact evaluation is to determine how the beneficial impacts can be strengthened. The envisaged information/ outcomes from this evaluation will be used to inform current (review) and future policies including intervention design around small enterprise support.

b) Entities and the DSBD’s Research Units use programme performance data to identify shortcoming in programme implementation and opportunities to enhance access to finance and financial inclusion. Entities’ programmes performance data was further used as an input in the formulation of the National Integrated Small Enterprise Development (NISED) Strategic Framework. The NISED Strategic Framework outlines government’s future policy direction for the SMME and Co-operatives sector.

26 May 2023 - NW1518

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Kruger, Mr HC to ask the Minister of Small Business Development

What (a) progress has been made in terms of establishing new Small Enterprise Finance Agency and Small Enterprise Development Agency branches and/or service points in rural communities since the implementation of her department’s strategy and (b) are her department's targets for further expansion in the coming years?”

Reply:

  1. The Small Enterprise Development Agency has adjudicated 78 and signed contracts with 52 access points during the 2022-23 financial year as shown below. The additional twenty-six (26) access points will be contracted during 2023/24 financial year.

Furthermore, since the beginning of the sixth administration, sefa has provided financial support as follows in the rural towns and villages of South Africa:

Township per Province and District